On-chain data shows how soaring gas fees could set Ethereum back from competitor

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Critics believe Ethereum’s rising gas charges would force the project to fall prey to its rival blockchains, but on-chain evidence shows otherwise.

Ether (ETH) is the second-largest cryptocurrency and leads the smart contract market through a variety of network use indicators. Although the network has been overrun by peak operation, which causes median fees to exceed $10, the network impact of its massive consumer and developer base appears to be sufficient to maintain its status as the second-ranked cryptocurrency in market capitalisation.

However, several main on-chain indicators are starting to suggest a possible shift in Etheruem’s dominance, which begs the age-old concern as to whether the “Ethereum killer” would be able to dethrone the top network?

Smart contracts Total Value Locked (TVL) ranking. Source: defillama.com

As seen above, the Ethereum network is largely dominated by decentralised applications (dApps). Due to its high gas transaction costs, the Ethereum Newtork tends to be at a disadvantage to its rivals when comparing the number of active addresses.

Over the past fortnight, FLOW Blockchain’s NBA Top Shot had about 80,000 active addresses five times higher than Ethereum’s Rarible NFT marketplace or SushiSwap. Thus, the first data to be analysed is the number of active regular addresses around each blockchain.

 

Daily active addresses. Source: coinmetrics.io

The above chart reveals that Tron (TRX) has recently exceeded Ethereum in active daily addresses, although this statistic can be quickly exaggerated. The Tron network has almost zero payments for basic transfers, which makes an unequal contrast.

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By calculating successful transactions and transfers, it is easier to remove addresses that do not contribute to the network.

 

Transactions and transfers, adjusted, USD. Source: coinmetrics.io

Through doing this, we can see that Tron is not even equal to Ethereum’s figures, even though Cardano’s (ADA) recent price rise has led to a virtual tie between the two.

Oddly enough, the Tron network carries more than 14.5 billion Tether (USDT) in circulation, which by itself should improve the network utilisation metrics. Meanwhile, Cardano has 90 per cent less active addresses per day than Ethereum, and both networks perform the same volume of transfers and transactions.

This is particularly troublesome as Ethereum handles 20 billion Tether tokens and also oversees all of the transfers of Chainlink (LINK), USD Coin (USDC), Wrapped ETH (WETH) and many others.

 

ETH, ADA, NEM, NEO, TRX market cap, USD million. Source: cointrader.pro

These data could, at least technically, be expressed in market capitalisation. It also makes sense for Ethereum to conquer the list, since no other network is even similar to its decentralised apps.

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In addition, when evaluating the worth of transfers and deposits, Ethereum leads by 50 times if we exclude the dubious numbers mentioned earlier by Cardano.

For the time being, the results show that the four “Ethereum murderers” analysed above are unlikely to “flip” the Ethereum network anytime soon.

 

The views and opinions expressed here are solely those of the author

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